White house to project $2 trillion higher deficit over next decade
Gee, anyone guess why they released this Friday after the market closed. Black Monday anyone?
WASHINGTON (AP) — The Obama administration expects the federal deficit over the next decade to be $2 trillion bigger than previously estimated, White House officials said Friday, a setback for a president already facing a Congress and public wary over spending.
The new projection, to be announced on Tuesday, is for a cumulative 2010-2019 deficit of $9 trillion instead of the $7 trillion previously estimated. The new figure reflects slumping revenues from a worse economic picture than was expected earlier this year. The officials spoke only on the condition of anonymity ahead of next week’s announcement.
Like they already didn’t know this?
China will be pleased
Obama will actually use this to urge health reform, arguing that health care costs must be contained to reduce the deficit. If the projected deficit had gone down, he’d use that to promote health care reform too, arguing that these “savings” will pay for health care. And most of the sheeple will go baaaaah either way.
Actually, I am really looking forward to monday to see how creative that CNBC (and others) can be in spinning this so that it is really good news. You know we all need some more good news.
Don’t worry – Be Happy.
Edited to add link.
Commercial real estate time bomb!
An important caveat to the ‘$9 trillion deficit’ projection is that it’s a CASH BASIS deficit, which is meaningless for an entity with long-dated obligations. Corporate earnings reports are all prepared on an accrual basis. If they reported on a cash basis, Sarbanes-Oxley would send them to jail.
Usgov reports on an accrual basis, but only in the Financial Report of the United States issued each December. Neither Congress nor the mainstream media pays the slightest attention to it. The continued use of meaningless cash-basis deficits represents a very open, in-your-face conspiracy to lie and mislead, which has been going on for decades.
Usgov’s accrual-basis deficit consistently runs higher than the cash-basis deficit, because Usgov is not properly reserving for veterans benefits, military retirement, and the like. The accrual basis deficit ALREADY has reached multi-trillions in fiscal years earlier in this decade. Full inclusion of entitlements programs would drive it still higher.
My own estimate of the 10-year deficit, on an accrual accounting basis, is $50 trillion. Numbers like this are so large as to be uninformative, except in relation to annual GDP, which is in the $14 to 15 trillion range.
It suffices to draw the simple, directional conclusion that as interest expenditures and entitlements deficits go exponential, Usgov will NEVER AGAIN RUN A SURPLUS IN OUR LIFETIMES. As I never tire of repeating, ‘democracy’ coupled with paper money is a doomsday machine. Its own perverse incentives ensure that its little fiat-currency engine will scream past the redline and explode in a heap of twisted metal. Please remain behind the blast shields, folks, unless you enjoy eating hot steel.
As I never tire of repeating, ‘democracy’ coupled with paper money is a doomsday machine. Its own perverse incentives ensure that its little fiat-currency engine will scream past the redline and explode in a heap of twisted metal. Please remain behind the blast shields, folks, unless you enjoy eating hot steel.